PBMs, Rx Firms Blast Draft Part D Formulary
Model Issued by USP

Managed Care Week, August 23, 2004

Both pharmaceutical companies and pharmacy
benefit managers were disappointed with a draft model released by
CMS last week indicating how a formulary might be structured for the
Medicare Part D benefit.

The model, prepared by nongovernmental
standards-setting organization United States Pharmacopeial
Convention, Inc. (USP) proposed a methodology for grouping
pharmaceuticals into therapeutic categories and classes. The
Medicare Prescription Drug, Improvement and Modernization Act of
2003 directed USP to develop the model, which is likely to undergo
significant revision before being finalized later this year.

The Pharmaceutical Care Management Assn. (PCMA),
which represents PBMs, criticized the draft for including too many
therapeutic classes, while the Pharmaceutical Research and
Manufacturers of America (PhRMA) said it had too few.

How broadly each category and class is defined is
a crucial aspect of the Part D drug benefit, because the law
requires Medicare pharmacy plans to offer as few as two drugs in
each category. Using a smaller number of broad buckets gives
pharmacy plans more negotiating power with drug companies over which
medications will be included on formularies.

USP's draft list has 43 categories and 138 drug
classes. For example, cardiovascular medications are grouped into
one therapeutic category with 11 pharmacologic classes, such as
beta-blockers, and 20 subdivisions like nonselective and
cardioselective beta-blockers.

"Employers, unions, health plans, and other
purchasers typically offer prescription drug plans with coverage for
50 to 100 therapeutic classes," PCMA said. If USP's draft model is
embraced, "such an approach would move far beyond how formularies
are structured currently in the commercial marketplace," it
warned.

PhRMA said the draft "fails to provide patients
with critical medicine options. USP unaccountably clusters commonly
prescribed types of medicines with outmoded forms of treatment,
allowing plans to structure formularies that exclude many types of
the medicines that patients use and need and doctors prescribe."

CMS will hold a public meeting to discuss the
draft in Baltimore on Aug. 27, 2004, and will close the public
comment period on Sept. 17. USP expects to submit a final version of
the formulary model to CMS in December.

View the draft guidelines at www.usp.org/pdf/drugInformation/mmg/draftModelGuidelines.pdf.